1.11 PFI contracts stipulate that buildings have to be maintained to a specified standard: part of the unitary charge covers asset maintenance. Our previous analysis has shown that the contractually agreed standards under PFI have resulted in higher maintenance spending in PFI hospitals.11 Public bodies have the ability to reduce maintenance spending in non-PFI assets, but this is much more difficult to do under a PFI contract. Respondents to our 2017 survey tended to consider that maintenance standards were higher under PFI.12
1.12 Guaranteed maintenance standards and spending can be achieved without the use of private finance by entering into long-term maintenance contracts, or ring-fencing maintenance funds. However, this is not common practice and current pressures on public sector budgets are resulting in significant reductions in maintenance spending on non-PFI assets in some sectors. For example between 2014-15 and 2015-16, health trusts reported an increase in the critical infrastructure maintenance backlog of more than 50% to £2.3 billion. Less funding is available to address this maintenance backlog - in 2015-16 and 2016-17, HM Treasury allowed the NHS to move more than £1 billion of funding allocated for capital investment to pay for day-to-day spending.
1.13 The IPA told us that one of the benefits of PFI was that if problems with a building emerge, for example due to poor initial construction work, this will be the responsibility of the private sector, not the public sector. It notes that problems in Edinburgh PFI schools and fire safety defects discovered in PFI hospitals were being resolved by the SPVs responsible for the building.
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11 See footnote 10.
12 Four of the Five departments that were able to respond considered maintenance standards were higher under PFI.